She has 4,000 dollars.
A = P(1 + r/n)nt
where,
A = final amount
P = initial investment
r = interest rate
n = number of times interest is applied
t = number of time periods
Case A:
A = P(1 + r/n)nt
= 4000(1 + 0.1/1)(1*2)
= 4000(1.1)2
= 4000 * 1.21
= $4840.00
A = P(1 + rt)
where,
A = final amount
P = initial investment
r = interest rate
t = time in years
Case B:
A = P(1 + rt)
= 4000(1 + 0.1*2)
= 4000 * 1.2
= $4800.00
4840 - 4800 = 40, which means your answer is B) The compount interest account earns 40 more in two years than the simple interest account.
Hope this helps :)